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China MEE - World Bank Workshop on Resource Mobilization in the Convention on Biological Diversity: Harnessing Private Finance November 4-5, 2019, Beijing, China

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China MEE - World Bank Workshop on Resource Mobilization in the Convention on Biological Diversity: Harnessing Private Finance November 4-5, 2019, Beijing, China China MEE - World Bank Workshop on Resource Mobilization in the Convention on Biological Diversity: Harnessing Private Finance November 4-5, 2019, Beijing, China Proceedings of the workshop Contents Proceedings of the workshop ......................................................................................................................... 1 I. Summary of proceedings ............................................................................................................................. 1 II. Opening of the workshop ............................................................................................................................. 2 Key highlights from opening remarks ......................................................................................................... 3 III. Technical Sessions ........................................................................................................................................ 7 Technical Session 1 “The context: Preparing for the post-2020 global biodiversity framework” .................. 7 Key highlights from Technical Session 1 ..................................................................................................... 7 Technical Session 2 “Paving the way for private finance: financial sector policies and instruments” ......... 10 Key highlights from Technical Session 2 ................................................................................................... 10 Technical Session 3 “Measuring the impact of investing in biodiversity” .................................................... 13 Key highlights from Technical Session 3 ................................................................................................... 13 Technical Session 4 “Innovative mechanisms for financing biodiversity: experience to date” .................... 18 Key highlights from Technical Session 4 ................................................................................................... 18 IV. Working groups: recommendations going forward ................................................................................... 22 Summary of recommendations from Working groups #1-5 ..................................................................... 22 V. Closing remarks .......................................................................................................................................... 23 VI. Annex 1: List of Participants ....................................................................................................................... 25 VII. Annex 2: Agenda ........................................................................................................................................ 31 I. Summary of proceedings 1. A workshop on “Resource Mobilization in the Convention on Biological Diversity: Harnessing Private Finance” was held in Beijing on November 4-5, 2019 with support of the World Bank, the Ministry of Ecology and Environment (MEE) of China and the Foreign Environmental Cooperation Center (FECO). 1 2. The objective was to provide technical insights on the role of private sector finance in resource mobilization in the context of the post-2020 global biodiversity framework, to be adopted at the 15th Conference of the Parties (COP-15) to the Convention on Biological Diversity (CBD) in Kunming. 3. The workshop took stock of the lessons learned on resource mobilization under the Strategic Plan for Biodiversity for 2011-2020 and the Aichi Targets, acknowledging that biodiversity and ecosystem conservation continue to rely heavily on public funding and face a significant financing gap. This makes resource mobilization, from all sources and notably from private sources, one of the central challenges for the post- 2020 framework and the focus of this workshop. The technical segment (Sessions 1-3) examined the key obstacles to, and the enabling environment required for, private sector investment in biodiversity and ecosystems at scale. In turn, Session 4 showcased a range of innovative financial instruments that are emerging to connect private capital to environmentally-responsible projects. The Working Groups then synthesized the discussions into recommendations. 4. Key messages from the Technical Sessions and Working Groups: a) Biodiversity finance remains niche and needs to be scaled up. It represents ~1 percent of environmentally-relevant taxes and a small portion of green finance; financial flows that are harmful to biodiversity outweigh biodiversity-friendly investments by a factor of 10. b) Public sector finance and policies are the backbone of resource mobilization, both in terms of ensuring continued predictable flow of funds into biodiversity and creating the enabling conditions and regulatory frameworks and de-risking transactions to catalyze private forces. c) On the private side, the body of experience is growing fast and so is the identification of key hurdles. Many instruments have emerged to tailor to different projects and investor needs, but to attract private finance at scale: (i) standard impact measurement tools need to be developed; (ii) transaction costs and risks need to come down; (iii) projects, usually small in size, need to be scaled up and their models standardized to attract institutional investors. d) Evidence is emerging on the role of governments to crowd in private finance. Public policies must mainstream biodiversity considerations into fiscal, financial and monetary policies to create the enabling conditions. Decelerating brown finance (e.g., repurposing environmentally-harmful subsidies and taxing the “bads”) is as if not more important as accelerating green finance. Green regulations also favor the adoption of impact metrics by the financial and private sector. Financial regulators can send strong signals, for example, through the use of green investment taxonomies. 5. Over the course of the two days, the workshop was attended by 67 representatives of the Chinese Government, notably from the Ministry of Finance and the MEE, and several other CBD Parties and the Secretariat, the European Commission, the financial sector, multilateral and bilateral development agencies, NGOs and academic experts. The full participant list is included in Annex 1. II. Opening of the workshop 6. The workshop was opened with introductory remarks by the moderator, Mr. Liu Ning, CBD Negotiator and Deputy Director General at the MEE of China. Mr. Liu reiterated the objectives and context of the workshop and introduced the opening speakers. MEE-WB Workshop: Resource Mobilization in the CBD 2 Beijing, November 4-5, 2019 Key highlights from opening remarks • Rapid global biodiversity loss threatens to undermine 80 percent (35 of 44) SDGs. • Biodiversity conservation relies heavily on public funding (including ODA) and faces a significant financing gap. • Global public goods such as biodiversity support not only environmental objectives but also poverty-reduction goals. Biodiversity provides the foundation for ecosystem services that underpin agriculture, forestry, fisheries, livelihoods and cities. • A strong resource mobilization component is crucial for ensuring effective implementation of the post-2020 global biodiversity framework. • The private sector represents potential in the context of the CBD and is inevitable for biodiversity conservation, not least due to its ability to innovate to solve environmental problems. • Private sector financing should not crowd out continued public sector support for biodiversity. • Financial resources for biodiversity should be used efficiently and effectively and for this it is key to build capacity and promote innovation. • Financial instruments should support the implementation of National Biodiversity Strategies and Action Plans (NBSAPs). • China has developed and constitutionalized the vision of “ecological civilization” and is spearheading its implementation through initiatives such as the Ecological Redline Policy and the national PES mechanism. • China has also built a solid body of experience in green finance, including in green bonds and green lending. The country’s experience could be instrumental in informing the resource mobilization component of the post-2020 framework. Mr. Zhang Wencai (Director General, Department of International Economic and Financial Cooperation, Ministry of Finance of China) 1. The Director General of the MOF opened the workshop by framing the context: the growing global concern over loss and degradation of the environmental public goods such as biodiversity and the increasing global awareness of their importance for human well-being, development and poverty reduction. He reiterated that China attaches great importance to ecological and environmental issues including biodiversity loss and climate change and is exploring potential pathways to address them: the low carbon and energy-efficient economy, circular economy, environmental protection. As communicated in General Secretary Xi Jinping’s recent public statement, China has developed a national strategy for ecological protection and for high-quality development of the Yellow River and a vision of “ecological civilization”. The treasury has been actively supporting ecological protection and has stepped up efforts to improve the mechanism of ecological compensation, so as to contribute to the implementation of the eco-civilization vision. MEE-WB Workshop: Resource Mobilization in the CBD 3 Beijing, November 4-5, 2019 2. Mr. Zhang put forward 4 key messages to the workshop:
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